EX-99.(c).4 EX-99.(C).4 2 d505474dex99c4.htm EX-99.(C).4 Exhibit (c) (4) Confidential PROJECT DENALI Presentation to the Board of Directors February 4, 2013 [***] indicates information that has been omitted on the basis of a confidential treatment request pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This information has been filed separately with the Securities and Exchange Commission (the “SEC”). Evercore Partners https://www.sec.gov/Archives/edgar/data/826083/000119312513228037/d505474dex99c4.htm[12/21/2017 2:42:08 PM]
EX-99.(c).4 Confidential These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for the Special Committee of the Board of Directors (the “Committee”) and the Board of Directors (the “Board”) of Denali Inc. (the “Company”) to whom such materials are directly addressed and delivered. These materials are based on information provided by or on behalf of the Committee and Board and/or other potential transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent investigation or verification of such information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the management of the Company and/or other third parties or obtained from public sources, Evercore has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management or third parties (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials have been developed by and are proprietary to Evercore and were prepared for the benefit and use of the Committee and Board. These materials were compiled on a confidential basis for use by the Committee and Board in evaluating the potential transaction described herein and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other professionals in other business areas of Evercore and its affiliates. Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. EVERCORE PARTNERS https://www.sec.gov/Archives/edgar/data/826083/000119312513228037/d505474dex99c4.htm[12/21/2017 2:42:08 PM]
EX-99.(c).4 Table of Contents Confidential Transaction and Process Summary Denali Financial Projections Valuation Analyses Section I II III Evercore Partners https://www.sec.gov/Archives/edgar/data/826083/000119312513228037/d505474dex99c4.htm[12/21/2017 2:42:08 PM]
EX-99.(c).4 Confidential I. Transaction and Process Summary Evercore Partners https://www.sec.gov/Archives/edgar/data/826083/000119312513228037/d505474dex99c4.htm[12/21/2017 2:42:08 PM]
EX-99.(c).4 Overview Confidential The Special Committee has asked Evercore whether, in our opinion, the Merger Consideration is fair, from a financial point of view, to the holders of shares of Company Common Stock entitled to receive such Merger Consideration This presentation contains a summary of certain analyses that, among other things, Evercore has performed in connection with rendering our opinion: - Trading Multiple Analysis - Present Value of Future Stock Price Analysis - Leveraged Buy-out Analysis - Share Buyback Analysis - Premiums Paid Analysis Evercore has also performed certain supplemental analyses including: - Discounted Cash Flow Analysis - Analyst Price Target Analysis - Historical Trading Range Analysis The following presentation and financial analyses included herein are based on the following financial projections: - The Boston Consulting Group, Inc.’s (“BCG”) projections prepared at the direction of the Special Committee (the “BCG Case”) - In addition, Evercore has reviewed certain productivity gains identified by Management and has analyzed a case that reflects 25% to 75% of such productivity cost take-outs as incremental benefits to the BCG Case (the “Productivity Case”) Since BCG Case projections were only available through EBIT, Evercore applied certain working capital and cash flow assumptions from the 9/21 Case to the BCG Case to arrive at net income and free cash flow for the BCG and Productivity Cases. Denali Management agrees that the drivers of the key working capital elements are consistent with the drivers that were used in the 9/21 Case - Denali Management’s projections from September 21, 2012 (the “9/21 Case”), adjusted with updated information as provided by Denali Management - Currently available projections of 10 Wall Street research analysts through FY15E which were extrapolated to FY18E by keeping revenue growth and margins constant (“Street Median”) Within the set of Wall Street analyst projections, the lowest projections came from Citigroup Inc. as of 11/16/12 (“Street Low”), while the highest projections were from Bank of America Corporation as of 11/15/12 (“Street High”) We have applied certain working capital and cash flow assumptions from the 9/21 Case to the Wall Street projections to arrive at net income and free cash flow for the Street Median Case. Denali Management agrees that the drivers of the key working capital elements are consistent with the drivers that were used in the 9/21 Case Note: All capitalized terms within this document not expressly defined have the meaning as set forth in the Merger Agreement Evercore Partners 1 https://www.sec.gov/Archives/edgar/data/826083/000119312513228037/d505474dex99c4.htm[12/21/2017 2:42:08 PM]
EX-99.(c).4 Summary of Current Proposal Confidential Transaction Value and Implied Premiums Analysis Transaction Valuation ($ in billions, except for per share amounts) Offer Price per Share $13.65 Implied Equity Value $24.1 Plus: Debt (01/31/13E) (1) 9.2 Less: Cash (01/31/13E) (1) (14.9) Implied Enterprise Value $18.4 Premium Analysis Closing Prices Average Prices TEV Premium to Unaffected Date: Close Premium Average Premium Premium (2) Unaffected Price (3) $10.88 25.5% - - 36.5% 1 Week Prior 10.97 24.4% $10.94 24.8% 34.9% 2 Week Prior 9.97 36.9% 10.74 27.1% 55.1% 1 Month Prior 10.67 27.9% 10.57 29.2% 40.4% 3 Months Prior 9.35 46.0% 9.94 37.3% 70.9% 6 Months Prior 12.32 10.8% 10.54 29.5% 14.7% 1 Year Prior 15.94 (14.4%) 13.01 4.9% (18.2%) 2 Years Prior 14.39 (5.1%) 14.14 (3.5%) (6.7%) 52 Week High - at Closing 18.32 (25.5%) 52 Week Low - at Closing 8.86 54.1% Implied Transaction Multiples Management BCG Productivity Case Wall Street Research BoD Preliminary (5) 9/21 Case (4) BCG 25% 75% Low Street Median High Enterprise Value To: FY 2013E EBITDA 4.1 x 4.1 x 4.2 x 4.2 x 4.2 x 4.1 x 4.1 x 4.1 x FY 2014E EBITDA 3.9 4.3 4.7 4.6 4.4 4.7 4.4 4.3 FY 2015E EBITDA 3.4 - 4.7 4.3 3.6 5.0 4.7 4.1 Equity Value To: FY 2013E Net Income 8.1 x 8.1 x 8.4 x 8.4 x 8.4 x 8.1 x 8.1 x 8.1 x https://www.sec.gov/Archives/edgar/data/826083/000119312513228037/d505474dex99c4.htm[12/21/2017 2:42:08 PM]
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